INSTITUTE OF ACCOUNTANCY ARUSHA

MODULE GUIDELINES

AFU 06106: PRINCIPLES OF BANKING OPERATIONS

FACILITATOR: Ms. PHILIPINA KIWALA

ACADEMIC YEAR: 2022/2023

1. General Module Information

Module Name: Principles of Banking Operations.

Module Code: AFU 06106

Semester: I

Level: Ordinary Diploma in Finance and Banking

and Ordinary Diploma in Accountancy

Location: Arusha – Main Campus

Credits: 14

Contact Hours per Week: Lecture = 2, Tutorial = 1

Pre-requisite: None

Main Reference Book: Tadeo A. S. (2012): Principles of Banking

2nd Edition. Tanzania Institute of Bankers.

2. Module Description

Principles of Banking Operations introduces on the means or ways in which bank

operates and the facilities used, the kind of accounts operated, banker’s customer
relationship, international trade and how international money transfer done through the
bank.

3. Aims, Objectives and Learning Context

3.1 Course Aims

Principles of banking operations will enabled the student to know the principles of
banks, how the bank operates in general and the facilities that enabled the bank daily
operations in order to fulfil the customer’s needs.
3.2 Learning Context and Graduate Attributes

This module includes a number of teaching and learning techniques which may
include self-learning, lectures, tutorials and seminars, case studies, videos and
student presentations. Graduate attributes include in-depth knowledge of the
principles of banking, banking operations and facilities used to support the banking
daily operations.
4. Module Contexts

TOPIC SUB- OBJECTIVES LEARNING ASSESSMENT TASK

TOPICS OUTCOME METHODOL
OGY
1.Explai -Identify the At the end of this -Group 1. Explain the
Explain the
n what procedures topic students assignment meaning of
are should be able to deposits deposits.
used in - Presentation
deposits concept as it 2. Explain the
receiving a) Explain the applied in types of
- Written
deposits. meaning of deposits.
Banking examination 3. Explain the
deposits
b) Explaining industry. features of
- the types of each type of
Demonstrate deposits deposits.
c) Explain the 4. Explaining
how to count
features of the
cash in class. each type of advantages
deposits. and
-Explain
d) Explaining disadvantage
how to the of each type
record advantages of deposits.
deposit slips and
disadvantage
in the bank of each type
books of deposits.

Referen 1. Buzell, D. H. (2004), Principles of Banking, American Bankers

ces Association
2. Cecchetti, S. G. (2007), Money, Banking and Financial Markets,
McGraw-Hill College
2.Descri At the end of this -Presentation
-Identify the Use principles 1. Explain the
be the topic students of banking
procedu types of -Individual meaning of
res to credit should be able operations Assignment/ credit
handle facilities to; knowledge to facility.
Written
small-
loan available a) Explain the examination 2. Identify the
- Describe the
proposit from a meaning of types of
procedures to credit
ions commercial credit handle small- facilities
bank. facility. available
loan
b) Identify the from a
-Report the propositions commercial
types of
credit credit bank.
worthiness facilities
3. Explain how
of a small- available
to assess the
from a
loan credit
commercial
worthiness
applicant. bank.
of a small-
-Issue loan c) Explain how loan
to assess the applicant.
forms to the
credit
successful 4. Explain how
worthiness
loan of a small- to Issue loan
applicants. loan forms to the
applicant. successful
d) Explain how loan
to Issue loan applicants.
forms to the
successful
loan
applicants.

Referen
ces 1. Koch, T.W and MacDonald S. S. (2005), Bank Management, South-
Western Pub
2. Miller, R. L. and Pulsinelli, R. W. (1989), Modern Money and Banking,
2nd edition, McGraw-Hill
 At the end of this
- Identify the
3.Demo topic students Demonstrate
different -Presentation 1. Defining
nstrate should be able how the bank
types of loan and
how to to; - Written parties
loan is
borrowers. examination
manage a) Defining involved in
managed.
- Describe loan lending
issued
the process.
bank b) Parties
properties of involved in 2. Explain the
loans
a good lending meaning of
process. Security.
security.
- Visit c) Explain the 3. Explain the
different different
borrowers
types of types of
regularly. borrowers.
borrowers.

d) Explain the 4. Describe

meaning of the
Security.
properties
e) Describe the of a good
properties of
security.
a good
security. 5. Explaining

f) Explaining how to
how to manage
manage bank bank loans.
loans

1. Mishkin, F. S. (2003), The Economics of Money, Banking, and

Referen
ces Financial Markets, 7th edition, Addison-Wesley
2. Cox D. and Denis (1993), Banking and Finance: Accounts, Audit and
Practice, Butterworths
4. At the end of this Banking -Group
- List
Explain topic students operations assignment 1. Explain the
procedures
the legal should be able knowledge to -Presentation meaning of
in issuing
procedu to; explain the cheque and
cheques and
res prior a) Explain the legal credit card
credit card - Written
to meaning of procedures 2. Essential
services to examination
issuing cheque and prior to issuing items of
customers.
cheque credit card. cheque and cheque
-Explain to
and b) Explain to credit card 3. Conditions
prospective
credit prospective services to for stopping
customers
card customers clients. payment by
the
services the cheque
procedures
to procedures 4. Steps used
requisite in
clients requisite in in the
applying for
applying for operation of
a
a credit card
cheque/credi
cheque/credi 5. Benefits of
t card
t card using credit
services.
services. card.

- 6. Explain to

Demonstrate prospectiv
to clients e
how to fill-in customers
the the
cheque/credi procedures
t card requisite in
application
applying
forms.
for a
cheque
services.

Referen 1. Davis A. (1993), Banking Operations, Pitman U.K.

ces 2. Ritter, L. S., Silber, W. L, and Udell, G. F. (2003), Principles of Money,

Banking & Financial Markets, Addison-Wesley.
5. Identify - List the basic At the end of this Presentation1. Explain what
Apply the
the basic components of topic students principles the banker’s
-Individual contract is.
obligations the basic should be able to; of banking Assignment/ 2. Explain the
arising out banker’s contract a) Explain the to Identify
-Written basic components
of the - Establish the basic examination
the basic of the basic
banker’s contractual components obligations banker’s contract.
contract. capacity and of the basic arising out 3. Explain how to
integrity of old banker’s of the establish the
and prospective contract. banker’s contractual
customers. b) Explain how contract. capacity and
- List the to establish integrity of old
circumstances the and prospective
which could contractual customers.
amount to capacity and 4. List the
breaching of integrity of circumstances
contract with a old and which could
customer prospective amount to
customers. breaching of
c) List the contract with a
circumstances customer.
which could
amount to
breaching of
contract with
a customer

References 1. Thomas, L. B. (2005), Money, Banking and Financial Markets, South-

Western Pub
2. Wiketye, P. (2001); Elements of Money and Banking; 1st Ed.; IDM;
Tanzania.
6. Apply -Identify At the end of this -Individual 1. Explain the
Apply the
the basic the type topic students basic legal Assignment/ meaning of
legal and nature should be able to; - existing and
banking
banking of both a) Explain the rules and Presentation prospective
rules and existing meaning of principles - Written customers.
principles and existing and when examination 2. Explain the
when prospective prospective dealing type and
dealing customers. customers. nature of
with the
with the b) Explain the existing both existing
existing - Identify type and and the and
and the the basic nature of prospective prospective
prospective legal
both customers. customers.
customers banking
existing 3. Identify the
rules and
and basic legal
principles
prospective banking rules
in relation
customers. and principles
to opening
c) Identify the in relation to
and
basic legal opening and
maintaining
banking maintaining
customer’s
rules and customer’s
account.
principles in account.
relation to 4. Accept or
- Accept or
opening and reject a
reject a
maintaining simple
simple
customer’s banker-
banker-
account. customer
customer
c) Accept or reject contract offer
contract
a simple banker- banking.
offer
banking customer
contract offer
banking.

References 1. Ellinger E.P. Lomnicka. Hooley. E,: Modern Banking Law. Oxford
 University Press Morrison A.D, Wilhelm W.J. : Investment Banking -
Institutions, Politics, and Law, Oxford

2. Beecham, J.B. (1994), The Monetary and Financial System ;3rd Ed. Pitman,
U.K.

7. Explain - Explain Nostro At the end of this Apply the - 1. Explain Nostro
how to accounts topic students principles Presentati accounts.
Process of on
inter-bank - Explain Vostro should be able to; banking 2. Explain Vostro
transactio accounts a) Explain Nostro knowledg - accounts.
ns e to how Individual
- Reconcile simple accounts 3. Reconcile
to Process Assignme
inter-bank accounts b) Explain Vostro nt/ simple inter-bank
inter-bank
accounts accounts.
transactio -Written
c) Reconcile ns examinati
simple inter-bank on

accounts

Reference 1. Davis A. (1993), Banking Operations, Pitman U.K.

2. Ritter, L. S., Silber, W. L, and Udell, G. F. (2003), Principles of
Money, Banking & Financial Markets, Addison-Wesley.
8. - Identify the At the end of this Apply the - 1. Identify the
Describe various ways of topic students principles Presentati various ways of
the transferring funds of on transferring funds.
process should be able to; banking
for - Explain how to a) Explain the knowledg - Written 2. Explain how to
remitting send customers’ examinati send customers’
various ways of e to
and money describe on money.
transferring funds.
receiving the
- Explain how to 3. Explain how to
customers b) Explain how to process
receive customers’ receive customers’
’ funds. send customers’ for
money. money.
money. remitting
and
c) Explain how to
receiving
receive customers’ customers
 money. ’ funds

Reference 1. Beecham, J.B. (1994); The Monetary and Financial System; 3rd Ed.;
Pitman; U.K.
2. Cox, D. and J.M. (1990); The Success in Elements of Banking; 6th Ed.
U.K.
9. Explain - Identify the At the end of this Apply the - 1. Explain the
how to documents used in topic students principles Presentati meaning of
handle international trade. of on international trade.
simple should be able to; banking
internatio - Deal in a) Identify the knowledg - Written 2. E6xplain the
nal trade importation/export documents used in e to examinati documents used in
transactio ation process international trade. explain on international trade.
ns. how to
- Deal in simple b) Deal in handle
foreign currency importation/export simple
purchase and 2. Deal in
ation process internatio
selling with importation/export
c) Deal in simple nal trade ation process
customers.
foreign currency transactio
ns. 3. Deal in simple
purchase and
foreign currency
selling with
purchase and
customers.
selling with
customers.

Reference 1. Ritter, L. S., Silber, W. L, and Udell, G. F. (2003), Principles of Money, Banking
s & Financial Markets, Addison-Wesley.
2. Wiketye, P. (2001); Elements of Money and Banking; 1st Ed.; IDM; Tanzania.
 5. ASSESSMENT PLAN

5.1 ENABLING AND SUB ENABLING OUTCOMES

ENABLING OUTCOMES SUB ENABLING OUTCOMES

2.1 Practice the banking skills 2.1.1 Explain what are deposits
2.1.2 Describe the procedures to handle small-loan
propositions
2.1.3 Demonstrate how to manage issued bank loans

2.2 Monitor compliance to basic contract and
banking laws
2.2.1 Explain the legal procedures prior to issuing
cheque and credit card services to clients
2.2.2 Identify the basic obligations arising out of the
bankers’ contract
2.2.3 Apply the basic legal banking rules and
principles when dealing with the existing and the
prospective customers

2.3 Assist customers to handle international
trade transactions
2.3.1 Explain how to Process inter-bank transactions
2.3.2 Describe the process for remitting and receiving
customers’ funds
2.3.3 Explain how to handle simple international
trade transactions

5.2 SPECIFICATIONS OF COMPETENCES

The table below shows sub-enabling outcome, task associated for each sub-enabling outcome and
expected competences/outcomes or abilities for each item in the assessment area.
S/N Sub-Enabling Learning outcomes & related tasks. Competences to be Tasks Assessed
assessed under CA & SE

Sub-enabling learning Related tasks.

understandin

outcomes
Knowledge

CA =40%
attributes

SE =60%
Wider
skills

2.1.1 Explain what are 1. Identify the √ √

deposits procedures used in
receiving deposits

2.1.2 Describe the procedures
to handle small-loan
propositions
2.1.3 Demonstrate how to
manage issued bank loans
2.2.1 Explain the legal
procedures prior to issuing
cheque and credit card
services to clients
2.2.2 Identify the basic
obligations arising out of the
banker’s contract
2. Demonstrate how to √ √
count cash in class
3. Explain how to √ √
record deposit slips in
the bank books
1. Identify the types of √ √
credit facilities
available from a
commercial bank
2. Report the credit √ √
worthiness of a small-
loan applicant
3. Issue loan forms to √ √
the successful loan
applicants.
1. Identify the different √ √
types of borrowers
2. Describe the √ √
properties of a good
security
3. Visit borrowers √ √
regularly
1. List procedures in √ √
issuing cheques and
credit card services to
customers
2. Explain to √ √
prospective customers
the procedures requisite
in applying for a
cheque/credit card
services
3. Demonstrate to √ √
clients how to fill-in
the cheque/credit card
application forms
1. List the basic √ √
components of the
basic banker’s contract
2. Establish the √ √
contractual capacity
and integrity of old and
prospective customers
 3. List the √ √
circumstances which
could amount to
breaching of contract
with a customer.
2.2.3 Apply the basic legal 1. Identify the type and √ √
banking rules and principles nature of both existing
when dealing with the existing and prospective
and the prospective customers customers.
2. Identify the basic √ √
legal banking rules and
principles in relation to
opening and
maintaining customer’s
account.
3. Accept or reject a √ √
simple banker-
customer contract offer
banking.
2.3.1 Explain how to Process 1. Explain Nostro √ √
inter-bank transactions accounts

2. Explain Vostro √ √
accounts

3. Reconcile simple √ √
inter-bank accounts

2.3.2 Describe the process for 1. Identify the various √ √

remitting and receiving ways of transferring
customers’ funds. funds
2. Explain how to send √ √
customers’ money

3. Explain how to √ √
receive customers’
money
2.3.3 Explain how to handle 1. Identify the √ √
simple international trade documents used in
transactions international trade.
2. Deal in √ √
importation/exportation
process
3. Deal in simple √ √
foreign currency
purchase and selling
 with customers

13.3.7 Learning Context

The module will be delivered by use of lectures and class seminars
13.3.8 Learning Materials
13.3.8.1 Required Reading

1. Buzell, D. H. (2004), Principles of Banking, American Bankers Association

2. Cecchetti, S. G. (2007), Money, Banking and Financial Markets, McGraw-Hill College
3. Koch, T.W and MacDonald S. S. (2005), Bank Management, South-Western Pub
4. Miller, R. L. and Pulsinelli, R. W. (1989), Modern Money and Banking, 2nd edition,
McGraw-Hill
5 Mishkin, F. S. (2003), The Economics of Money, Banking, and Financial Markets, 7th
edition, Addison-Wesley
13.3.8.2 Additional Reading
1. Cox D. and Denis (1993), Banking and Finance: Accounts, Audit and Practice,
Butterworths
2. Davis A. (1993), Banking Operations, Pitman U.K.
3. Ritter, L. S., Silber, W. L, and Udell, G. F. (2003), Principles of Money, Banking &
Financial Markets, Addison-Wesley
4. Thomas, L. B. (2005), Money, Banking and Financial Markets, South-Western Pub
5. Wiketye, P. (2001); Elements of Money and Banking; 1st Ed.; IDM; Tanzania
13.3.9 Integrated Method of Assessment
Assessment through timed tests, assignments, seminars, quizzes, case studies and
examinations
13.3.10 Module Assessment:
Coursework 40%
End of Semester Exam 60%

Module Facilitator Contact:

Ms. Philipina Kiwala
Institute of Accountancy Arusha
P.O. Box 2798, Njiro Hill, Arusha, Tanzania
philipinatemba95@gmail.com
Website: www.iaa.ac.tz